Tesla protests measures it says would limit expansion in Washington state

One electric car company is worried Washington might shut down its business. Tesla has been selling high-performance all-electric cars in 22 states - with sales in Washington second only to California. (AP Photo/File)

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UPDATE: Geekwire's Todd Bishop reports electric car maker Tesla has secured a provision in the Washington state Legislature allowing the company to open as many additional stores as it wants in the state.

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Washington likes to think of itself as a green economy: we're into solar, we love electric cars.

But one electric car company is worried Washington might shut down its business. Tesla has been selling high-performance all-electric cars in 22 states - with sales in Washington second only to California.

But the company doesn't sell through local dealerships. It sells directly from company-owned showrooms, which appears to run afoul of a Washington law that prohibits manufacturers from competing with local dealers.

Diarmuid O'Connell is Tesla's vice president of development, and he said the reason Tesla doesn't sell through local dealers is that it takes a long time to educate customers about the advantages of the car - and no local dealer is going to put in that kind of time.

"We're certainly trying to create a direct and intimate connection between the company and the customers in the larger interest of making sure electric vehicles, ours and others, flourish in the marketplace over time," said O'Connell.

According to O'Connell, the dealer's association has brought on two more lobbying firms to focus on the legislation that would attempt to prevent Tesla from directly selling its own vehicles.

"The issue is far from dead," he said.

O'Connell said the Washington State Auto Dealers Association has strong connections in the state legislature.

"When we hear about these things, we (Tesla) have the opportunity to come to town to talk to legislatures, and talk to the media, and talk to customers and the general public and to hear about the fundamental unfairness about what's happening," said O'Connell. "It really starts to stimulate a reaction to the dealer's moves and clarifies what's going on."

That's part of the motivation behind a rally Monday in Olympia, to protest any attempt to stop Tesla from selling its cars in Washington.

He said similar legislation is playing out across the country. Washington is only one of the places dealers are trying to shut the company down, and O'Connell believes the fight is far from over.

As for whether the relatively small number of Teslas sold in Washington state constitutes unfair competition, O'Connell said it's only a competitive threat to the extent that BMW sells against Mercedes in the marketplace.

"You could argue that we're taking shares, that we're competing within the segment vehicles [...] premium sedans, but that's just normal course competition in the free market. An innovator comes in with a new product and challenges the incumbents and that makes everybody better. That dynamic, however, is what the dealers would basically have us shut down."

Hear the full interview with Diarmuid O'Connell, vice president of development at Tesla, on this week's edition of the ROSSFIRE podcast with Dave Ross.